Condo for Sale pricing?

I put in a bid today on a property that the exiting owner bought for 222,000 in 2004. Im in the same complex and have admired it for some time so when it came up for sale I immediately placed an offer due to its location and excellent layout and condition. The problem is my colleagues suggest that the market will continue to deteroriate and my bid should come in at 20% of his purchase price. They say that paying what paid for it is okay but be preapared to buckle in and watch this thing go down considerably first and why would someoen elect to do that.





My question is based on these facts would you press forward and pay pretty close to what he bought it for or sit as a casual obeserver and se things come down to earth and bid at that time. Im a renter presently so there is nothing forcing me into this arrangement (unless he accepts my intital offer which isnt likely) as its only been on the market a week.





In Massachusetts





Thanks for an responseCondo for Sale pricing?
The only way to answer this is to know what similar condos in the same complex have been selling for recently. It really has nothing to do with what he paid for it.





After researching the going price for that condo at that time, you have to decide if that's what you really want to do. Do you have the down payment to buy? Will you qualify for a mortgage?





As for the market declining, it may continue to decline. It may be that your investment in a home loses value over the next couple of years. If you plan on staying put for a long time, it probably really doesn't matter much in the big scheme of things. If you don't buy now and prices continue to drop, how much more rent will you have paid over the next year or two that you could have been putting towards a mortgage and reaping the tax benefit from?





Did you use a realtor to make the offer? If so, they can help you with researching the current value of the condo. Then again, if you used a realtor, they should have advised you on that before you made the offer.





Good luck to you.Condo for Sale pricing?
It depends on your time horizon. You cannot ever time the market perfectlly. The market is slow in a lot of places but if you are planning on staying in the house and it is a personal residence for 5-10 years than you should come out ahead. A lot of the bad news in commercial real estate is out there already. The many markets have had time to digest the information. There may be a little more down side but you can never know how long it will last. You can go to some website where they have rental vs buying analysis information or you can talk to a real estate agent and have them do a rental vs buy analysis for you. This will take in writeoffs, taxes, extra fees etc. Again the most important thing is your time horizon!
First off, ignore what the owner paid for the property. If he paid $220k, but similar units are now going for $200k, you should be bidding closer to that price - not what the owner paid. Your only concern is what is the market value of the property - not what the owner paid, or what his asking price is. (hopefully he's not being stupid and his asking price is close to what the market value is, but be aware these two prices don't always match.)





The market is in an uncertain state right now, and is going to be highly influenced due to the nearby location where the condo is located. Think a little about the types of industries and companies that are nearby. Do you think they'll continue to do OK - in which case people will still need places to live, keeping prices stable. Or do you think they're going to lose people - in which case people may leave the area, causing prices to fall. How are other condos/houses in the area doing? Are they selling quickly, or are they staying on the market for months even after several price reductions? Also consider nearby schools. A good school district is always a good way to keep prices stable, and provide an excellent way to keep your asking price high when you eventually move out.





Finally, what are your own plans? If you foresee yourself staying in this place for 5-10 years then you'll probably do OK. Remember, this will be your HOME first. Yeah, we all hope our house's market value appreciates, but it's far more important to be living some place you can afford and are comfortable in. Even if your house does appreciate considerably, it's not as though you can use that money (not directly, anyways) without selling the place.





It's also highly unlikely that your rent will go down, even if housing prices do. So if you manage to get a fixed mortgage for about what you were paying in rent, consider that a big victory. After all, you'll now be acquiring equity which is something you can never do just paying rent.

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